New York Attorney General Letitia James and a group of 57 elected officials urged New York City Mayor Bill de Blasio to delay the city’s annual tax and water lien sale in order to protect homeowners as the COVID-19 crisis continues. In a letter to Mayor de Blasio, Attorney General James and other elected officials called for the removal of more than 4,700 Class 1 Properties, or residential buildings with three or fewer units, from the tax lien sale scheduled for September 4, 2020. As New Yorkers are still facing significant financial burdens due to the pandemic, including these homes in the tax lien sale will only exacerbate the economic crisis and result in homeowners — mostly in communities of color — potentially losing their homes during this time.
“Now is the time to support hardworking homeowners, not saddle them with undue financial burden,” said Attorney General James. “The tax lien sale has a disproportionate impact on communities of color and will only exacerbate the financial hardships so many are already facing in the middle of a pandemic. It’s incumbent on government to protect the people — not kick them when they’re already down — and I urge Mayor de Blasio to take action immediately.”
Every year, the New York City Department of Finance (DOF) holds a tax lien sale, whereby the tax liens on properties for unpaid property taxes and water bills are sold off in an auction. The terms imposed by the tax lien sale on New Yorkers are dramatic: mandatory five percent surcharges, legal fees, and a nine or 18 percent interest rate that compounds daily. These additional fees can quickly turn a relatively small tax lien into an overwhelming financial burden, eventually pushing homeowners into foreclosure.
The buildings included in the sale every year are disproportionately located in communities of color. In fact, according to the Coalition for Affordable Homes, the city is six times more likely to sell a lien on a property in a majority Black neighborhood and two times more likely to sell a lien on a property in a majority Hispanic neighborhood than in a majority white neighborhood.
The city generally conducts vigorous outreach to property owners to ensure residents in debt to the city are aware that they are in jeopardy of entering the lien sale process and knowledgeable about alternative payment plans. This year, however, because of the severe constraints that COVID-19 has placed on outreach efforts, much of this work was not done at nearly the same levels as in years past. In addition, Mayor de Blasio only just announced on August 23, 2020 that the sale would in fact occur on September 4, 2020, giving New Yorkers only a fraction of the time to plan. As a result, many vulnerable families and individuals may not have any information about how to remove their homes from the sale or even be aware that their property is included in the sale.
Attorney General James has long advocated for reforms to the lien sale program to address some of its gravest injustices and renews those calls today, including:
- Eliminating water and sewer lien sales for low and middle-income occupants of one-to-three family homes (there are currently 2,639 Class 1 properties on the list that have water debt only);
- Creating a “Homeowner Advocate” position who would help homeowners navigate different agencies involved in the tax lien sale (no such position currently exists); and
- Excluding nonprofits and houses of worship from both the water and the property tax lien sale (there are currently 49 non-profit properties on the list, all resulting from water debt).
The letter was signed by a coalition of 57 elected officials, representing New Yorkers at the federal, state, and city level.
The manes are not listed, because a few are seeking reelection or higher office.
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